On November 15th 2011, Bloomberg published an article stating that “80 is the new 65” in terms of retirement. In the survey, 76% of participants stated that having a certain amount saved before retirement is more important than retiring at a certain age. 74% expect to work in retirement, of which 25% expect to work until 80 because they don’t have the proper savings.
I also read that our financial literacy declines as we age. In a country that has the best colleges and universities in the world and were 51% of the wealth is held by people over 60, why is that we lose our financial smarts in our golden years? The study that exhibits these facts is outlined in an article I posted to my Facebook and Twitter called "Our financial smart erode quickly after 60”. Basically as we age, we lost 1%-2% of our knowledge about money after turning 60. The reasons are attributed to memory loss and changes in our IQ. This idea is not far-fetched, as people in this age group often suffer from Alzheimer’s disease.
There’s a vicious financial cycle that we are ignoring. We, as a nation, are determined to work until we physically can’t because we have not saved, but we can’t admit that we are not as financially savvy when we are old. We are not taught the value of a dollar and how to grow the dollar as children. Our beliefs about credit and other debt are based on fairy tales of a sales associate at a lending institution.
Here what you can do to keep your financial wits about yourself:
1). Become more financially literate by researching topics that are appealing to you. Take the financial literacy quiz I posted on Facebook and Twitter. It will grade your quiz immediately. I even took it. I passed with a 70%, which surpasses the average score for my age group by 17%.
2). Estimate how much you will need in retirement. Use a planning tool like the one on ShareBuilder.com.
3). Create a savings that you can afford.
4). Talk to an investment advisor, if you feel the need to do so.
5).Open your traditional IRA, Roth IRA, or join for employer’s 401k program right away.
"Putting My Money Where My Mouth Is" is a journal about real life experiences and concerns of Jéneen R. Perkins. The purpose of the blog is to exhibit the real life challenges and answer the tough questions posed by the concepts of business, entrepreneurship and money.